Commodity prices and inflation: A forward-looking price model

Adams, F. Gérard; Ichino, Yasukazu

doi:10.1016/0161-8938(95)00017-n

Cited by 16 publications

(14 citation statements)

References 4 publications

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“…14 Measures of the global output gap, and output gaps in the OECD and the non-OECD economies were also included in the analysis. 15 It is well established that the global output gap is an important factor behind the cyclical behaviour of commodity prices, especially when output growth is above potential (Adams and Ichino, 1995;Rae and Turner, 2001). The second specification sought to test directly for the possible recent impact of strong growth in the non-OECD by including a variable for the differential between the rates of GDP growth in the non-OECD and the OECD starting in 2001.…”

Section: Estimates Of the Impact Of Output Growth On Commodity Pricesmentioning

confidence: 99%

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Globalisation and OECD consumer price inflation

Pain¹,

Koske²,

Sollie³

2008

OECD Journal: Economic Studies

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Over the past 25 years inflation has moderated considerably in all OECD economies. At the same time, the production of many goods and services has become increasingly internationalised and the level of trade between the OECD and non-OECD economies has risen markedly. This paper investigates the extent to which the observed changes in the inflation process can be attributed to the increasing integration of non-OECD economies into the global economy. The results of the analysis show that i) import prices have become a more important driver of domestic consumer prices since the mid-1990s; ii) the sensitivity of inflation to domestic economic conditions has declined whereas the sensitivity to foreign economic conditions has risen, working through import prices; and iii) the strong GDP growth in the non-OECD economies over the past five years has contributed to the growth of real oil and metals prices. A scenario analysis shows that globalisation has put upward pressure on inflation via higher commodity prices and downward pressure via lower non-commodity import prices with the latter effect having dominated in most OECD economies.

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Section: Estimates Of the Impact Of Output Growth On Commodity Pricesmentioning

confidence: 99%

“…A broader set of control variables were also considered initially for other possible macroeconomic influences, such as the US effective exchange rate and real short-term interest rate (Adams and Ichino, 1995;Hua, 1998).…”

Section: Thus Implicitly the Findings In Oecdmentioning

confidence: 99%

Globalisation and OECD consumer price inflation

Pain¹,

Koske²,

Sollie³

2008

OECD Journal: Economic Studies

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“…However, some of the recent studies have raised the question on the efficacy of the index in predicting inflation (Adams and Ichino, 1995;Furlong and Ingenito, 1996). Most of the previous studies are based on monthly price series that are prone to short-term idiosyncratic movements (Furlong, 1989).…”

Section: Introductionmentioning

confidence: 98%

Examining the CRB index as a leading indicator for US inflation

Acharya

Gentle

Paudel

2010

Applied Economics Letters

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This article analyses historical movements in the commodity futures market and its relationship to inflation. Specifically, the relationship between the Commodity Research Bureau (CRB) index and US inflation is investigated. The results show that the CRB index continues to be an effective early indicator of inflation. However, as the composition of the US economy changes, the CRB should continue to realign the index to maintain its long-term viability.

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“…Under rational expectations, the price today will contain all the information available and so it will anticipate the future price (Adams and Ichino, 1995). This means that commodity prices 6 change immediately when new information is available and prices of final goods react quite sluggishly, probably due to the fact that they are restricted by contracts or because of menu costs.…”

Section: Theory Of Commodity Prices and Inflationmentioning

confidence: 99%

“…And of course, commodity prices are not susceptible to revision and the data is directly available. However, commodities, as for example oil or food, are prone to irregular developments such as political instabilities in oil exporting countries or droughts (Adams and Ichino, 1995). To mitigate this caveat, one could, however, use broad commodity indices (Angell, 1992).…”

Section: Commodity Prices As Indicator Variables For Monetary Policymentioning

confidence: 99%

Monetary Policy, Commodity Prices and Inflation - Empirical Evidence from the US

Verheyen

2010

SSRN Journal

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Commodity prices and inflation: A forward-looking price model

Cited by 16 publications

References 4 publications

Globalisation and OECD consumer price inflation

Globalisation and OECD consumer price inflation

Examining the CRB index as a leading indicator for US inflation

Monetary Policy, Commodity Prices and Inflation - Empirical Evidence from the US

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